Mortgage Acronyms Flashcards
(75 cards)
AARMR (America Association of Residential Mortgage Regulators)
Responsible for the
creation of the National Mortgage Licensing System (NMLS).
AFBA (Affiliated Business Arrangement)
An arrangement between two different companies
involved in providing services in the closing of a real estate transaction. There can be no
ownership interest. Requires disclosure under Real Estate Settlement Procedures Act (RESPA)
AMC (Appraisal Management Company):
The middleman between appraisers and mortgage
companies.
AML (Anti-Money Laundering)
A law in place to require financial institutions to prevent, detect
and report money laundering activities
APOR (Average Prime Offer Rate):
Rate used to determine whether a loan is high-cost or higher priced.
APR (Annual Percentage Rate):
It calculates the annual percentage rate you would pay on the loan once the costs of getting the loan are factored in.
ARM (Adjustable Rate Mortgage):
is a mortgage that will have a
fixed rate for a set period and then the rate is adjusted. The rate will normally be adjusted once or
twice a year.
ATR (Ability to Repay):
The rule that requires lenders to determine whether a borrower has the ability to repay their loan and requires verification of the information provided to prove the ability to repay
AUS (Automated Underwriting System):
Example: Used to automatically underwrite
conforming loans.
BSA (Bank Secrecy Act):
Requires Suspicious Activity Reports (SARS) to be filed regarding dubious activities.
CAIVRS (Credit Alert Verification Reporting System):
A federal database of people who have
delinquencies on any kind of federal debt.
CFPB (Consumer Financial Protection Bureau):
The federal entity that regulates the entire
mortgage industry.
CHARM (Consumer Handbook on Adjustable Rate Mortgages):
Required disclosure on ARM loans to educate the consumer about the type of loan they have
CLTV (Combined Loan to Value):
This ratio is calculated by dividing the amount of a 1st lien loan and the amount drawn on a HELOC or total amount of a 2nd lien loan by the appraised
value of the property. price or the appraised value of the property, whichever is less.
COE (Certificate of Eligibility):
Required document on VA loans to determine the amount of eligibility that veteran borrower has.
COFI (Cost of Funds Index):
Index used on ARM loans
DTI (Debt to Income):
two ratios, front end and back end DTI. Front end DTI (housing expense)
is determined by dividing the amount of housing divided by the borrower’s gross income. Back
end DTI is all debts divided by the borrower’s gross income. (Examples of debts: credit cards,
car loans, student loans. Not included = cell phone bills and utilities)
DU (Desktop Underwriter):
The Automated Underwing System used by Fannie Mae.
ECOA (Equal Credit Opportunity Act):
A law in the US that makes it illegal for any lender to
dis- criminate against an applicant based on race, religion, national origin, sex, etc.
FACTA (Fair and Accurate Credit Transactions Act):
Prevents identity theft, puts limits on
information sharing. Amendment to FCRA.
FCRA (Fair Credit Reporting Act):
Regulates how consumer-reporting agencies use consumer information.
FDIC (Federal Deposit Insurance Corporation):
Regulates depository institutions
FFIEC (Federal Financial Institutions Examination Council):
Collects and distributes HMDA
information
FHA (Federal Housing Administration):
The Federal Government Agency that oversees the US Housing Market. These mortgages are guaranteed by the Federal Government and offered by
banks/lenders.
